Todd Market Forecast Stock Market Update for Thursday 7/06/06
www.toddmarketforecast.com
Available Mon- Friday after 6:00 p.m. Eastern, 3:00 Pacific.
DOW + 73 on 800 net advances
NASDAQ COMP. + 2 on 150 net advances
SHORT TERM TREND Bullish
INTERMEDIATE TERM TREND Bullish
STOCK MARKET ANALYSIS:
Except for the Dow, most stock indices were either down or up slightly as the market warily awaits the non farm payroll figure for Friday. This report is the most market moving of all economic releases. Same store sales were slightly negative and this probably acted as a drag on the averages.
The Dow was helped by a ruling from the Florida Supreme Court which threw out the $145 billion verdict against big tobacco and caused a 5% jump for Altria. Interesting. Altria makes some investors nervous including us because of the potential for a ruinous court verdict, but even before today's surge, it had already appreciated by 250% since March of 2000.
Most indices have recently become mildly overbought as a result of the recent run up so it wouldn't be surprising to see some more backing and filling. It appears that the CBOE put call ratio is working, but the parameters seem to have changed. Yesterday, the indicator was a sky high 1.35 which suggested a rally on Thursday. Today, the figure was .80. This was once a bullish figure, but now it's probably somewhat negative.
On Friday, the jobs report will probably exert a major influence.
NEWS AND FUNDAMENTALS:
The ISM services index for June came in at 57.0%, down from 77.5% in May and less than the expected 59.6%. The prices paid component dropped to 73.9% down from May's figure of 77.5%. Initial Claims were 313k, below the expected 315k.
On the stock front, the aforementioned Altria gained 6%. Same store sales were positive for Jos. A. Bank Clothiers, Dollar General and Gottshalks which gained 11%, 4% and 5%. Hot Topic saw its same store sales fall less than expected and the stock added 11%.
On the negative side, BJ's Wholesale Club guided lower and sank 7%. Dress Barn same store sales rose, but the stock dropped 3%. P.F. Changs and Jo-Ann Stores had lower same store sales and each gave up 4%.
BOTTOM LINE:
Our S&P and NASDAQ intermediate term systems are back on a buy signal as of July 3rd. Mutual fund investors are 100% long in the stock fund of their choice.
Short term traders in the SPY and QQQQ are in cash. Stay there for now
For new subscribers, the QQQQ and SPY are exchange traded funds or Spiders. The former mimics the Nasdaq 100 and the latter mimics the S&P 500. ---- Additionally, an m.i.t. order means “market if touched” It means that your order becomes a market order if the price is touched.
OTHER MARKETS
We are on a buy for the bond market as of May 19.
We are on a sell for the greenback and a buy for the Euro as of June 30.
We are on a buy for gold as of June 21.
We are neutral on crude oil as of June 1
We're now on a long term negative for all major world markets, including those of the U.S., Britain, Canada, Germany, France and Japan. This is a first in many years, but it should be a fairly short time frame, meaning a few months.
STEPHEN TODD
A SHORT BIOGRAPHY
Editor and publisher of the Todd Market Forecast, a monthly stock market newsletter with an included nightly hotline.
Steve has published articles on the stock market in the following publications: Barron’s, Stock Market Magazine, Futures Magazine, The National Educator, and others.
His stock market commentary is heard on the following stations: CNBC, Bloomberg, CNNfn, Associated Press Radio, Business Radio Network, CKNW in Vancouver, British Columbia, KFWB, Los Angeles and ROBTV in Toronto, Ontario.
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TODD MARKET FORECAST
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